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HomeMy WebLinkAbout2023/06/26 - ADMIN - Minutes - City Council - Study Session Official minutes City council study session St. Louis Park, Minnesota June 26, 2023 The meeting convened at 6:30 p.m. Councilmembers present: Mayor Pro-Tem Nadia Mohamed, Tim Brausen, Sue Budd, Yolanda Farris, Lynette Dumalag and Margaret Rog Councilmembers absent: Mayor Jake Spano Staff present: City manager (Ms. Keller), deputy city manager (Ms. Walsh), building and energy director (Mr. Hoffman), finance director (Ms. Cruver), community development director (Ms. Barton), race equity and inclusion director (Ms. Guess), administrative services director (Ms. Brodeen), city clerk (Ms. Kennedy), elections and civic engagement coordinator (Mr. Sund) 1. Boards and commissions program purpose and next steps Ms. Kennedy and Mr. Sund presented the report. Councilmember Rog noted that she has heard from members of the housing authority that at least some of they did not understand the limitations of that body when they signed up for it, and that there is an assumption made that they will be more involved on advising the council on issues related to housing. Ms. Kennedy clarified that the intent of the themes included in the consultant analysis was to demonstrate that members of the bodies whose purpose and function are defined in statute seemed to better understand their work and role than members of the bodies who derive their authority from the city code. The intent was not to imply that they don’t have concerns related to feeling disconnected from the council, not understanding where their work shows up in decision-making processes or the appointment process. She stated the hope is that this process will result in the program having a more clearly defined purpose so that new processes can be implemented that will help remove barriers to participation, improve experiences for all stakeholders, and more closely align the program with the strategic priorities. Councilmember Rog asked about the phases and how staff envisions these phases working in next steps. Ms. Brodeen stated this is something staff is working on, especially on timing and engagement. Councilmember Rog asked how staff will deal with the excitement members have felt at being selected and then the group potentially sunsetting. Ms. Keller stated staff is very sensitive to this and will be very transparent about the process, why changes are being made, and what the program may look like going forward. Councilmember Brausen asked if there will be a pause on appointment of any new commission members, while going through this process. Ms. Keller stated all the details are not known yet but at this point, there is a pause in the recruitment and appointment process as staff and council work through this to redefine the purpose of the program. Councilmember Budd asked if those whose terms are up this year have been asked to extend their terms. Ms. Kennedy stated yes, all members with terms expiring in 2023 were offered the DocuSign Envelope ID: 2306E1E6-26D9-4FEC-BC47-AAA6BA4A752E Study session minutes -2- June 26, 2023 opportunity to extend their terms. Some members have chosen to leave at the end of their term for various reasons, but most opted to extend their terms. Mayor Pro Tem Mohamed asked about the timelines for this process. Ms. Kennedy stated for the time being the work of the boards and commissions will continue as usual until the engagement process is complete and council can provide direction on the program purpose. Councilmember Rog asked, given that housing is one of our five strategic priorities, is there an opportunity for the HA to continue on its statutory role and also add to their vision and purpose? Ms. Kennedy stated the overall purpose and scope of the body is defined in statute; however, members will have the opportunity to provide more feedback during the engagement process and will be subject to other programmatic changes that may occur. She added the focus right now is on defining the purpose for the whole program, not necessarily each individual group. Councilmembers discussion: Councilmember Brausen thanked all board and commission members for their ongoing service, adding this is not stated enough, and he appreciates their work. Councilmember Brausen explained process is important for community engagement and he views boards and commissions as a resource and sounding board for staff more than council. He noted the council benefits from the input if it can be done in way that is efficient and doesn’t delay decision-making processes. He sees a need for boards and commissions to be nimble and responsive, especially as the council is discussing and making decisions on items. He stated the process of getting this feedback back to council quick enough is a major concern. He stated boards and commissions could review programs we have in place, or they could look at specific issues as they arise. He noted policy decisions are council’s responsibility and he would like to see more community input and utilize commissions to get feedback from the community. He continued that all the work of boards and commissions needs to include race equity considerations. Councilmember Dumalag stated this is a great opportunity to continue to gain the public’s trust. She suggested having commissions look at policies and discuss with council as a part of the systems approach also provides a way to engage community. She noted boards and commissions also provide a way for the public to engage outside of going directly to a councilmember, which would be valuable. Councilmember Rog stated she sees potential in having two sets of recommendations associated with items that come before council – one being a staff recommendation and another being from a board or commission. She explained this happened with the Dakota Park bridge project, noting the recommendations were not the same, and that was helpful in her decision-making. She added this shows value to boards and commissions in an advisory capacity and making recommendations. Councilmember Rog stated she also sees boards and commissions as providing leadership experience and added smaller groups of residents can accomplish more meaningful work than DocuSign Envelope ID: 2306E1E6-26D9-4FEC-BC47-AAA6BA4A752E Study session minutes -3- June 26, 2023 larger groups. She added alignment with the council’s systems work lends itself to more timely decisions and provides a way to integrate more feedback from boards and commissions. Councilmember Rog stated boards and commissions needs to be brought along with council and feel they are part of the decision-making process. She noted she questions whether boards and commissions should plan events in the community, adding it’s fun, but noted it is a different purpose than advising council. She also asked if boards and commissions should have a budget to do what they want to do. Councilmember Rog stated boards and commissions validate what the council does, and it’s not just council making decisions, even on items such as the levy. She added she’d love to have feedback from a small group of engaged citizens on the levy. Councilmember Brausen stated he sees a role for boards and commissions to do public education around what the council is doing. He added the HRC and ESC have done this work and he’d like to see more. Councilmember Budd added both public education and visibility are also roles for boards and commissions. Councilmember Brausen noted he and the mayor have also been interested in exploring a transportation commission as that aligns with strategic priorities as well as a youth commission. Mayor Pro Tem Mohamed raised the idea of exploring options to make sure service on a board or commission is worth members’ time, such as compensation. Mayor Pro Tem Mohamed stated she wants a clear line between the role of councilmembers and the role of commission members. She noted there are certain conversations that council has because they are elected officials and that is the trust the community places in them as elected officials. She added it’s also then up to council to answer for the decisions that are made. She agreed engagement around purpose is needed. Councilmember Rog stated this is where recommendations from boards and commissions can come into play and be useful. She added they also need to have more real authority and see their role in decision-making otherwise they do work and are left to wonder if they have any influence at all. Councilmember Brausen added an important piece missing is board and commission members understanding their role and the influence they have. Councilmember Budd stated she likes the term feedback and added communication is so critical in this process. Ms. Kennedy stated the feedback from council is helpful and a good start. Mr. Sund reviewed the general ideas heard and recorded by staff. He stated the next step will be to begin engagement and discuss this information with all stakeholder groups and then provide a recommendation on the purpose and structure of the program to the council for review. DocuSign Envelope ID: 2306E1E6-26D9-4FEC-BC47-AAA6BA4A752E Study session minutes -4- June 26, 2023 2. Budget update Ms. Cruver presented the staff report. Councilmember Rog asked why the actual license and permit revenue was so much higher than the budgeted amount for 2022. Mr. Hoffman clarified the budgeted amount reflects the projection of what staff think will realistically occur in the next year in terms of development so the city is not in a situation of expecting revenue that may not materialize. In 2022 several financial packages came through that allowed certain developments to move forward that may not have otherwise happened and therefore were not included in the budgeted revenue. Councilmember Budd asked where the revenues for the light rail stations and surrounding developments are budgeted. Mr. Hoffman explained portions could happen in 2023 or 2024. Part of the budgeting process involves staff determining the likelihood and feasibility of when developments will occur. Councilmember Dumalag asked if the revenues outlined are for construction permits. Mr. Hoffman stated there are two types of revenues, licensing and building permits. Councilmember Rog asked how the budget might be impacted by the Beltline development. Mr. Hoffman stated there is a chance that could still occur in 2023 and staff is monitoring closely. Ms. Cruver noted this is why collaboration between departments is so important in the budget and forecasting process. Mr. Hoffman stated it is important to understand that project costs don’t necessarily equate to permit values and revenues. For 2023 it is projected that building permit values will be $180 million to $200 million, which is consistent for the city and is very good for a fully developed community. Ms. Cruver stated it is important in the budgeting process to look at past revenues to ensure that any peaks are treated as one-time revenues rather than an ongoing revenue source that can be counted on in future years. Councilmember Brausen asked if the local government aid is already offset by fiscal disparities or if there will be an impact. Ms. Cruver stated she does not anticipate an impact. She noted the local government aid is great to have, but it can be very hard to count on as an ongoing revenue source. Councilmember Budd questioned if municipal state aid is an ongoing revenue source. Ms. Cruver responded yes, noting she will check with the engineering director on the stability of the amount. Councilmember Mohamed asked for clarification around the additional $620,000 the city is projected to receive from the state for affordable housing. Ms. Cruver stated this was a direct result of the increase in the metro area sales tax and is an ongoing revenue resource. Councilmember Rog asked if the state was also making funds available to outfit city facilities with renewable energy sources. Mr. Hoffman stated there will be funds available, but the process for obtaining the funds is still unknown. He stated staff is tracking the program and will seek funding when it is available. DocuSign Envelope ID: 2306E1E6-26D9-4FEC-BC47-AAA6BA4A752E Study session minutes -5- June 26, 2023 Councilmember Budd noted some of the revenue opportunities being offered through the state are competitive grants while some of the rebate programs for residents have no limits. Ms. Cruver outlined projected expenses for 2024, noting the preliminary budget will include known salary increases and estimates for bargaining units without settled contracts. She explained one of the expenses that is going to be a bit harder to estimate is for employee benefit costs because the city is in the processing of renewing its contracts for benefit providers. Staff will project a slightly larger than average increase for 2024 to accommodate the new contracts until actual numbers are received sometime in the fall. Ms. Cruver reviewed the American Rescue Plan Act appropriations. Ms. Brodeen clarified the one-time grant funds will be reviewed in the fall and staff will provide a recommendation on a process to potentially make some funds available to community partners. Ms. Keller explained the city has designated all its ARPA funds and staff are now looking at 2024 dollars the city no longer needs to expend in those ways and how they may be reallocated. Councilmember Budd asked about if the Hennepin County social worker program was funded through one-time dollars or if it would continue for 2024. Ms. Keller stated the costs could be absorbed internally for 2024 and could be a budget request. Ms. Cruver noted it is a contractual position through an agreement with the county which has different implications on the budget than a full-time city employee. Councilmember Dumalag asked if potential grants for public safety are included in the budget. Ms. Keller stated staff is awaiting a decision on the RAISE grant and other grant opportunities and then will factor that into the budget. Ms. Cruver explained staff would like direction from council related to planning for a Housing Rehabilitation Authority levy to dedicate funding to housing activities and an Economic Development Authority levy to support staff time and extend the lifetime of flexible development funds. Councilmember Budd asked for clarification on the EDA levy and whether a climate element was included. Ms. Cruver stated when the EDA levy was created the funding was used to support staff. In subsequent years council made the decision to move a portion of the funds previously allocated to support staff, $300,000, to the climate fund. She noted this is a year-to-year decision point for the council because the funds in the development account still do not have an ongoing revenue source. Ms. Keller added last year the council chose not to increase the EDA levy. Councilmember Brausen requested the current balance of the development fund. Ms. Barton stated the current balance in the development fund is just under $10 million, noting there are pending sales of EDA property for both the Beltline and Wooddale projects. DocuSign Envelope ID: 2306E1E6-26D9-4FEC-BC47-AAA6BA4A752E Study session minutes -6- June 26, 2023 Councilmember Rog asked if there are any major purchases anticipated in 2024 from the development fund. Ms. Barton stated staff does not anticipate any, however staff likes to budget funds to be able to pursue opportunities that may arise. Councilmember Rog asked how the unknowns around one-time funds might impact the city’s capital improvement plan. Ms. Cruver stated this will be a big part of the overall budget plan because there is a lot of variability that has driven some of the levy increases in recent years and many of the one-time revenues that are available can be used for capital improvements. She explained staff will be looking at this closely to determine if any of the public safety aid can be used for capital improvements that could then provide some levy relief. Councilmember Rog referenced the affordable housing trust fund match and asked if planning for an HRA levy or not impacts the capacity to provide the match or if there are other funding sources that the city can utilize to cover those costs. Ms. Barton stated the city would need $300,000 in funding to get the $150,000. She explained if the HRA levy was not utilized for 2024 the city’s pooled TIF dollars could likely be used to provide the match. Ms. Cruver stated the affordable housing trust fund is another account where the spending doesn’t necessarily follow the calendar year. She explained it will be important to have a conversation around fund balance policy to ensure staff is properly targeting the balance needed in that fund to accomplish the city’s goals and incorporate the changes at the state level. Councilmember Brausen asked what the affordable housing trust fund balance is currently. Ms. Barton stated the unobligated balance is approximately $1.7 million. She noted the city funds approximately $2 million in programs out of this fund, needs $3 million in matching funds for the multi-living land trust, and $1.3 million for the Minnetonka Boulevard affordable home ownership program. Councilmembers Budd, Dumalag, Farris, and Brausen supported both policy questions posed to council. Councilmember Rog supported the HRA levy, noting she has not been supportive of additional levies in the past. She stated this levy is clear and staff is being more strategic and intentional about how the funds are being used to achieve meaningful outcomes. She explained she does not support the EDA levy, noting in the beginning it was not intended to be an ongoing or permanent fund. She stated the city has adequate money in the development fund for 2024 and anticipates additional revenue from pending sales. She noted she may support an EDA levy in future years if there is a demonstrated need. She added she is not supportive of collecting the money for use “just in case” because there is enough money in the budget to accomplish their goals and feels it should be used with more discernment. Mayor Pro Tem Mohamed supported both policy questions, adding it’s a great way to protect the city’s strategic priorities. She stated she looks forward to having this conversation more in- depth over the next few months. DocuSign Envelope ID: 2306E1E6-26D9-4FEC-BC47-AAA6BA4A752E Study session minutes -7- June 26, 2023 Communications/meeting check-in (verbal) Ms. Keller stated residents can call the city to report damaged or downed trees on streets or public property because of the storm on Saturday. Ms. Keller noted the Arrive and Thrive Gateway Project is scheduled on June 27 from 4-7 p.m. at the Municipal Service Center. Councilmember Brausen noted a few councilmembers attended the recent League of MN Cities conference and asked if there were any learnings. Mayor Pro Tem Mohamed noted the tour of the seaport and gathering with the other cities to network on projects, like affordable housing and climate action, was informative and helpful. She added many attendees were very excited about our staff and their great reputation across the state. Ms. Keller noted the cannabis reform and regulation session she attended. Councilmember Budd added the climate coalition event was very well attended. She and Councilmember Farris also participated in an affordable housing tour and saw innovative projects, including converting an old county jail into 80% affordable housing. Councilmember Farris stated she enjoyed hearing nice things about St. Louis Park from other conference attendees. Mayor Pro Tem Mohamed noted Eid is coming up, which is a 3-day holiday that features sweets. The meeting adjourned at 8:30 p.m. Written Reports 3. Elections cycle overview ______________________________________ ______________________________________ Melissa Kennedy, city clerk Jake Spano, mayor DocuSign Envelope ID: 2306E1E6-26D9-4FEC-BC47-AAA6BA4A752E